NU Online News Service, Feb. 17, 2005, 4:44 p.m. EST

A policyholder group says a proposed $600 million Executive Life Insurance Company settlement is too small.[@@]

The Executive Life Action Network, Los Angeles, a group that represents some of the policyholders affected by the 1991 failure of the life insurer, is asking state Sen. Jackie Speier, D-Hillsborough, Calif., chair of the state Senate Insurance Committee, to review the proposed settlement.

The group says the same California insurance regulators who negotiated the settlement have estimated that the collapse of Executive Life cost policyholders about $4.5 billion. Even the $600 million settlement seems to include only $225 million in “new money” on top of what already has been paid, the group says.

The group cites press reports suggesting that the French finance minister has said in Europe that agreeing to the settlement, rather than going to court, may have saved the French government agency that would be paying the settlement billions of dollars.

In addition to asking for a review of the settlement, the policyholder network is asking Speier’s committee to order an audit of all Executive Life estate funds that have been paid to lawyers, accounting experts, staff members of the California Department of Insurance and others.

“We want to know what happened to the millions spent to supposedly assist policyholders to recover the billions lost in this blatant case of fraud,” says Maureen Marr, a network co-founder.